The anti-dementia medication lecanemab will come with an extraordinarily high price tag if the Centers for Medicare & Medicaid Services (CMS) decides to cover it, according to a research letter in JAMA Internal Medicine.
Researchers at RAND estimate that covering the drug and other associated services could add between $2 billion and $5 billion in annual Medicare costs. This could also lead to "substantial out-of-pocket costs for beneficiaries lacking supplemental coverage,” the researchers said.
Those out-of-pocket costs could be as much as one-fifth of the annual income for a Medicare beneficiary, according to the study. The medication, developed by Eisai and Biogen, costs $26,500 a year, including treatment add-ons such as imaging.
The Food and Drug Administration (FDA) approved the use of lecanemab for mild cognitive impairment orr mild dementia prevalence in January through its accelerated approval pathway. The Veterans Health Administration’s (VHA's) announcement in March that it would cover the medication raised advocates' hopes that CMS would do the same, but CMS said it wanted to see more proof of lecanemab’s effectiveness, including possibly real-world evidence of how the drug fairs with VHA patients.
A CMS spokesperson told Fierce Healthcare at the time that “approval through FDA’s accelerated approval pathway does not necessarily indicate that the drug is effective at treating a condition.”
But the FDA could grant lecanemab full approval this year, and that might pressure CMS to start covering the drug for widespread use, the RAND researchers wrote.
"These medications have modest clinical benefit and clear risk of brain swelling and bleeding for patients, which in rare cases may be fatal," said Julia Cave Arbanas, one of the paper’s lead authors, said in a press release. "These additional costs could strain the Medicare program and its beneficiaries, who may face rising premiums to help Medicare pay for the drug."
"Additional premium increases are especially concerning because many older Americans rely on a fixed income," Arbanas added.
In the cross-sectional study, researchers did a cost analysis based on survey data from the 2018 Health and Retirement Study. They looked at traditional Medicare and Medicare Advantage beneficiaries aged 65 or older with mild cognitive impairment or mild dementia.
The researchers relied on prior studies and expert guidance in calculating that 35% of those patients would get neurocognitive testing, and, of those, 50% would get a PET scan, with a low estimate of 37% and a high estimate of 68%.
Among 7,588 participants representing 44 million beneficiaries, 16.2% had mild cognitive impairment or mild dementia.
“Total annualized weight-based per-beneficiary medication costs were $25 851,” the research letter stated. “Ancillary costs were $7,330, increasing per-patient total costs by 28%.”
If the low estimate of 85,687 eligible patients received lecanemab, it would cost Medicare about $2 billion a year. If the high estimate of 216,536 eligible patients received lecanemab, it would cost Medicare about $5.1 billion a year.
The coinsurance patients would have to pay could be as high as $6,636, which is about one-fifth of the median income of a U.S. Medicare beneficiary.
The authors conclude that they did not include in their estimates costs arising from caregiving, rebates, price changes or changes in patients’ cognitive performance.
“Despite incorporating increases in cognitive screening and case positivity rates, these estimates are conservative; changes in physician behavior, cognitive screening capacity and demand, new diagnoses of MCI or mild dementia, and associated spending may increase more than anticipated,” the research letter said.